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The effect of water pollution regulation on prices: Evidence from Wisconsin's phosphorus rule and sewer utility bills

Andrew Meyer and Zach Raff

Journal of Environmental Economics and Management, 2024, vol. 124, issue C

Abstract: In this paper, we estimate the consumer impacts of Wisconsin's “phosphorus rule”, which created the most stringent statewide water quality and effluent standards for phosphorus in the country. We examine how compliance with the rule affects real billing rates at sewer utilities in Wisconsin, providing the first empirical estimates of water pollution regulation on utility billing rates. We find that compliance with the phosphorous rule increases the average real sewer utility bill in our sample by 7–12%. Our results imply that sewer utilities pass through approximately $65.8 million to residential sewer rate payers annually, which is roughly ⅔ of the total sewer utility compliance costs of the rule. State government subsidies cover an additional ¼ of the sewer utility compliance costs.

Keywords: Environmental compliance cost; Nonpoint source pollution; Pass-through; Sewer utility; Water pollution abatement (search for similar items in EconPapers)
JEL-codes: H23 L95 Q52 Q53 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:124:y:2024:i:c:s0095069623001328

DOI: 10.1016/j.jeem.2023.102914

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Journal of Environmental Economics and Management is currently edited by M.A. Cole, A. Lange, D.J. Phaneuf, D. Popp, M.J. Roberts, M.D. Smith, C. Timmins, Q. Weninger and A.J. Yates

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